Employment in Germany is on the rise and households' real income is benefitting from higher wages
Frankfurt - AFP
The underlying growth trend of the German economy, Europe's biggest, remains "very robust," the country's central bank, or Bundesbank, said on Monday.
"The upward momentum of overall economic activity in Germany continued in the third quarter," the Bundesbank wrote in its latest monthly report.
The central bank conceded that the economic growth in the third quarter may not come out "quite as dynamic" as in the preceding quarters.
German gross domestic product (GDP) expanded by 0.3 percent and 0.4 percent in the first and second quarters, respectively.
"But the underlying economic trend remains very robust," it said, pointing to the "continued favourable consumer climate."
Employment was on the rise and households' real income was benefitting from higher wages and lower energy prices, the Bundesbank argued.
"That consumers are taking advantage of the favourable conditions to make additional purchases can be seen in the increased sales in consumer-orientated service sectors such as the retail and automobile sectors," the report wrote.
The construction industry had lost momentum and activity in the manufacturing sector was failing to pick up speed, the Bundesbank cautioned.
"Overall, industrial output is moving sideways and exports have not been able to match the previous high levels," the central bank said.
"But there are no signs of a deterioration," it insisted, pointing to business confidence surveys, such as that published by the Ifo economics institute in Munich.
Earlier on Monday, the Ifo said its monthly business confidence index slipped only slightly in October, as Europe's biggest economy shrugs off the different challenges it is currently facing, including the Volkswagen pollution-cheating scandal, the slowdown in emerging economies such as China and the massive influx in Europe of refugees from Syria.